Lightwire had been working on 10Gbit/s commercial products, but Cisco plans to apply the technology at higher speeds.

"The real purpose here for us, aside from our continued focus on the core [priorities], was to make sure we were on top of the 40Gbit/s and 100Gbit/s transition," says Hilton Romanski, Cisco's vice president of business development, whose job is to run Cisco's acquisitions and investments. (See Subtract Another Cisco Name.)

Cisco expects Lightwire to make a difference in both service-provider and data-center equipment.

That difference, by the way, is the lower cost and power afforded by ordinary silicon. Most optical chips have to be built in other materials, such as indium phosphide (InP). Using conventional silicon can be cheaper and can lead to lower-power devices. Moreover, silicon manufacturing technology advances more quickly, due to the enormous ecosystem of chipmakers and foundries hammering away at it.

(Note that actual lasers made of silicon are still hard to do. To our knowledge, Lightwire is still using an off-the-shelf, non-silicon laser in its optical modules.)

Cisco had invested in Lightwire's C round in 2011 as a way to keep an eye on -- and guide the development of -- silicon photonics, because Cisco figured the technology would come in handy soon. "This is one where we saw the transition coming," Romanski says.

Lightwire never disclosed how much it had raised. Its venture investors included New Science, Artiman and Novitas.

Lightwire's startup competition includes Kotura Inc. and Luxtera Inc. , and all three companies have been at this for years. (Lightwire was founded in 2002.) IBM Corp. (NYSE: IBM) and Intel Corp. (Nasdaq: INTC) are also dabbling in silicon photonics.

As for why Cisco picked Lightwire specifically,
Lightwire founder and CTO Kal Shastri will be joining Cisco as a distinguished engineer, meaning Cisco will have some key expertise on hand should it decide to push silicon photonics into other areas, such as optical backplanes.

Ideas like that are interesting to Cisco, but the company plans to stick to silicon-photonics modules for now, Romanski says.
Nearly all of Lightwire's roughly 60 employees will be joining Cisco as well.

"We see the intrinsic value of this as being far greater than what we're putting on the table," Romanski says.

What's the big deal about silicon photonics? Glad you asked. Here's an OFC/NFOEC summary from 2008:

re: Lightwire Points Cisco Toward 100G This is an interesting announcement on several fronts. First, this is a telecom/ datacom player bringing silicon photonics in house. Cisco could have bought a traditional 100G module maker but it bought a silicon photonics player. It is also a vote of confidence in the technology that is clearly becoming mature. Second, Cisco may be interested in transceivers but this is also an investment in system technology - for backplanes, intra-board device communications and eventually in its ASICs. Bell Labs has silicon photonics too so Cisco is not alone but still this feels like a hugely significant deal.

The New IP is actually bigger even than business. Like another hugely important tech that Light Reading is digging into right now, the New IP has the potential to change the world by fundamentally advancing what it is possible for people to achieve with communications.

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